Last month delivered no shortage of noise for investors, with sharp swings across equities, fixed income and alternative markets leaving even seasoned risk managers braced for impact. Against this backdrop, our Chief Investment Officer, Jeff Brummette, cuts through the volatility to uncover what really drove markets; from shifting central bank signals to the evolving AI arms race, the unusual behaviour of bonds, and the global spending trends shaping the year ahead. In the analysis that follows, Jeff distils the month of November’s complexity into clear insights to help you stay focused on what matters most.
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November was an exhausting month for risk managers, with equity markets experiencing heightened volatility across regions. Persistent uncertainty around global growth and shifting central bank rhetoric contributed to sharp intraday swings. Despite the turbulence, most major markets ended the month either marginally lower or broadly unchanged.
Equity Markets
Source: Bloomberg
Fixed Income Markets
Source: Bloomberg
Alternative Investments Markets
Source: Bloomberg
The chart below of the NASDAQ is a good example of the intra month swings. Early in the month the market fell, then, optimism around potential rate cuts drove a rally, only for mid-month concerns over slowing global growth and mixed tech earnings to trigger an even larger decline. Towards month-end, stabilisation occurred as bond yields eased and risk appetite improved slightly.
CCMP Index (NASDAQ Composite Index)
Source: Bloomberg
A variety of factors prompted this volatility, the U.S. Federal Reserve lowered rates at the end of October but suggested there was no guarantee of a cut in December, leaving markets uncertain about policy trajectory. At the same time, the ongoing U.S. government shutdown, which was not resolved until the middle of the month, cast a shadow over U.S. growth prospects and amplified investor concerns. While large-cap technology firms delivered strong earnings, there were growing concerns over the scale and sustainability of their AI related investment, adding to sector specific pressure. Meanwhile, Bitcoin and other cryptocurrencies dropped sharply, with no clear cause further spooking the markets. This culminated in a large sell-off in equity markets in the middle of the month.
Bitcoin vs Magnificent Seven
Source: Bloomberg
Bitcoin has also broken its correlation with the so-called ‘Magnificent 7’ and technology stocks more broadly. The crypto market remains highly leveraged and when positions unwind, the impact can be severe, often leading to forced or distressed selling. So far, these stresses have not spilled over into broader equity or credit markets, but it is an area to be watched.
In contrast gold and silver continue to rise.
Silver, Gold and Bitcoin
Source: Bloomberg
The size and the importance of the investment in AI capacity can’t be overstated.
Forecast Capital Expenditure by AI “Hyperscalers”
Source: BNP Paribas.
Includes Alphabet, Meta, Amazon and Microsoft
Alphabet, Meta, Amazon and Microsoft are at the forefront of the AI arms race. Together with OpenAI, Nvidia, Oracle, Anthropic and CoreWeave, these firms share a conviction that ever-larger data centres delivering massive amounts of computing power are necessary to achieve dominance in the AI space. Markets are increasingly discerning about which players might win the race.
Alphabet’s flagship AI product, Gemini, is notable for being trained exclusively on the company’s own Tensor Processing Units (TPUs), bypassing Nvidia’s GPUs entirely in a strategic move that underscores the importance of proprietary infrastructure. Meanwhile, Chinese firms are also making gains in the AI space despite little access to Nvidia’s most advanced products, signalling that alternative pathways to competitiveness exist.
The chart below highlights the growing dispersion of share price performance among leading AI players.
Growing Dispersion of Share Price Performance (%) for AI Companies
Source: Bloomberg
This is a very fast-moving space, despite the sheer scale of investment spending taking place. We expect this varied performance will continue to persist, which is likely to translate into increased equity market volatility.
Interestingly, during the recent equity market sell-off, bonds didn’t move very much which is somewhat alarming. Investors typically look to fixed income to offset equity losses, yet this time the expected flight to quality did not materialise. In fact, yields initially rose as concerns over fiscal deficits weighed on the longer end of the curve, limiting any meaningful price appreciation in government bonds.
UK and U.S. Ten-Year Government Bond Yields
Source: Bloomberg
The simultaneous strength in gold, silver and copper is a classic market signal that investors expect inflation to remain elevated or even accelerate. These metals are not just responding to monetary policy, but also to real-world supply and demand dynamics.
Central Bank Net Gold Demand
Source: Metal Focus, Refinitiv GFMS, World Gold Council, Capitalight Research
We see three global spending trends that will continue to heavily influence markets over the coming year. First, AI investment is set to persist and accelerate, with mega-cap technology firms funding much of this growth from free cashflow. Increasingly, they are also beginning to issue debt, while other players in the space such as Oracle are relying exclusively on borrowing. The scale of this debt issuance is expected to be significant over the next few years. This surge will collide with government spending that keeps rising. The UK provides a good example, as concerns about fiscal largesse remain front of mind. The latest UK budget increases both taxes and spending. leaning on optimistic assumptions about income and expenditure beyond 2027 to present a more favourable fiscal outlook.
National Accounts Taxes and Spending as a Share of GDP
Source: ONS, OBR
Second, defence spending is rising around the world. Europe is attempting to improve its defence capabilities amid uncertainty over continued U.S. security guarantees, while the U.S., China and Japan look to upgrade their arsenals, drawing lessons from the Russia-Ukraine conflict. All this increased defence spending will require additional debt issuance.
Finally, infrastructure spending on power, particularly electricity, will continue to grow. This reflects both AI’s growing energy demands and the ongoing shift from fossil fuels to electricity for transport, as well as heating and cooling our homes and businesses. Most of this investment will be debt financed and could well prove to be inflationary as commodity prices, such as copper and silver, respond to rising demand.
While this spending will support economic growth, it is also likely to contribute to further steepening in yield curves. Central banks remain broadly comfortable with inflation prospects and are unlikely to hike interest rates. We continue to expect the Bank of England and the U.S. Federal Reserve to lower rates over the next year, particularly in the U.S. if labour market conditions deteriorate further.
The price and value of investments and any income that might accrue may fall as well as rise and is not guaranteed. You may not get back the amount of your original investment.
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Hear more from the Oakglen experts
Our investment team continue to provide interesting and informative content to help keep you in the loop on recent global news and market trends. See below for some key highlights from around the world which some of the investment management team have recently covered:
Read more:
- November 2025 Investment Summary
Jeff Brummette, Chief Investment Officer
- Q3 2025: Discretionary Investment Management Service Update
Myles Renouf, Senior Investment Manager
- Beyond the Parade: China’s Silent Arsenal, the Doctrine of Unrestricted War and its potential implications on the West
William Lamond, Investment Director and Nigel Smith, Business Developement Executive
You can read other articles from the team on our News & Insights page.
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